January 21, 2022
  • January 21, 2022

2 stocks under the radar to buy now and hold for the next decade

By on January 1, 2022 0

LLast year, the coronavirus pandemic reshaped the world, accelerating the adoption of certain trends and technologies like cloud computing, e-commerce and video conferencing. More generally, the pandemic has triggered a massive digital transformation (DX) that will continue to impact virtually every industry for years to come.

In fact, companies will spend $ 6.3 trillion on DX initiatives between 2022 and 2024, according to International Data Corp. (IDC). This creates a substantial opportunity for investors, and businesses like Globant (NYSE: GLOB) and Pager (NYSE: PD) are poised to benefit, as both were designed to thrive in a digitally driven world.

Here’s what you need to know.

Image source: Getty Images.

1. Globe

Globant specializes in IT consulting and product engineering. Its portfolio consists of over 30 different studios, each representing an area of ​​deep expertise. This includes emerging trends such as blockchain and big data, as well as established technologies such as digital sales and marketing. Collectively, Globant uses this expertise to help organizations design and implement new products and achieve their digital transformation initiatives.

To complement its basic services, Globant also offers a range of proprietary software. For example, Navigate is a process exploration tool that uses artificial intelligence to analyze workflow efficiency and identify bottlenecks in an organization. And FluentLab is a framework that uses artificial intelligence to create conversational applications.

Despite intense competition, IDC has recognized Globant as a leader in improving the customer experience, and the company has gained large clients like Alphabetis Google and Walt disney. To this end, Globant has experienced strong sales growth over the past two years.

Metric

Q3 2019

Q3 2021

TCCA

Income (TTM)

$ 615.2 million

$ 1.2 billion

37%

Source: YCharts. TTM = 12 rolling months. CAGR = compound annual growth rate.

Recently, Globant launched a group of “reinvention studios” aimed at accelerating digital transformation in industries experiencing widespread disruption. For example, its multimedia and entertainment studio offers solutions that help customers create, launch and monetize premium streaming services. And its travel and hospitality studio combines marketing, reservations and loyalty programs to create a frictionless experience for customers.

Collectively, Globant values ​​its market opportunity at $ 154 billion in 2022, and management is implementing a smart growth strategy. To this end, as the digital transformation continues to accelerate, Globant and its shareholders stand to benefit. This is why this stock looks like a smart long-term investment.

2. Pager service

Digital transformation is just the start. Once an organization implements new digital solutions, it is essential to keep these technologies operational. Something as simple as a website crash could cost millions of dollars in revenue, and a protracted problem could permanently damage a business’s reputation. Fortunately, PagerDuty can help.

Its platform sits at the heart of the company’s IT ecosystem, collecting data from virtually any software system. This includes performance monitoring tools such as Datadog, communication platforms like Zoom, and customer service software like Selling power. Then, using these digital signals, PagerDuty relies on artificial intelligence to automatically predict and prevent problems like website crashes or system failures. Or if autocorrect isn’t an option, PagerDuty triggers a human response by alerting the appropriate teams and providing them with contextual information.

This differentiates PagerDuty from traditional incident response solutions, which involve slow manual identification, sorting and remediation, often allowing outages to drag on for hours or days. In comparison, PagerDuty enables organizations to react in real time, enabling issues to be resolved in minutes.

Unsurprisingly, this value proposition translated into solid revenue growth.

Metric

Q2 2020

Q2 2022

TCCA

Income (TTM)

$ 154.3 million

$ 262.2 million

30%

Source: Ycharts. TTM = 12 rolling months. CAGR = compound annual growth rate. Note: Q3 2022 ended October 31, 2021.

Of particular note is that PagerDuty posted a retention rate of 124% in the last quarter, up from 119% last year, indicating that the average customer spent 24% more in the past 12 months. . It’s also worth noting that PagerDuty has seen strong demand from larger customers as it currently serves 65% of the Fortune 100 and 45% of the Fortune 500. This includes well-known brands like Netflix and Nvidia.

Looking ahead, management estimates its addressable market at $ 36 billion, leaving plenty of room for future growth. This is why this action looks like a smart buy for long term investors.

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Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Trevor Jennevine owns Nvidia and Walt Disney. The Motley Fool owns and recommends Alphabet (A-shares), Alphabet (C-shares), Datadog, Globant, Netflix, Nvidia, PagerDuty, Salesforce.com, Walt Disney, and Zoom Video Communications. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.